A new bill proposed by Dempsey follows the example of the UK regulator Ofcom, which has extensive powers to investigate alleged anti-competitive practices and levy fines if it discovers abuses. The Department of Communications feels that the strength of the regulatory regime in the UK has been a key factor in ensuring that both availability and take-up of broadband there are much higher than in Ireland.

"I am convinced that we haven't the regulatory framework in place that will allow for the creation of competition in a speedy and timely manner, " said Dempsey, giving his approval for legislation to be drafted to enhance Comreg's powers.

In particular Dempsey believes local loop unbundling . . . the process by which operators are allowed access to the telecoms network controlled by Eircom . . .has been delayed by Comreg's lack of power to enforce regulatory decisions on the former state company.

"Full local loop unbundling is essential. It increases competition, innovation and choice on the DSL network for consumers. It is also a legal requirement under the EU regulatory framework.

Without it Ireland will never reach its potential, " he said.

But would a stronger regulatory framework have changed the way the market has developed in Ireland?

"No. We are subject to competition powers through the Competition Authority.

We are subject to regulation through Comreg. We've been subject to these powers and Eircom is a compliant company."

McRedmond said the new Comreg powers would make a difference only in the case where companies, such as Eircom, were not in compliance with regulation. He said Eircom has never been found to be in breach of regulations and nor has it been abusing a dominant position.

McRedmond said the issue of growing broadband penetration and availability, including resolving the row between Eircom and its competitors over local loop unbundling, would be resolved by consultation, not regulation.

"Just because they can't necessarily get their way doesn't mean Comreg should get more powers, " he said.

There's not one thing that would have been different about [the market] under the proposed new powers".

"Would liberalisation and growth have proceeded more smoothly if Comreg had been given greater powers from day one? I think the answer is yes."

Flynn argued that the threat of regulatory intervention can influence operators and change the way they behave.

"It's more about changing the habits of operators because they believe that these powers will be used, " he said.

Not surprisingly, given that Dempsey's desire to see the local loops unbundled tallies with Smart's own objectives, Flynn said the new powers are welcome.

"In local loop unbundling, for example, I think Eircom is not afraid of what Comreg could do to it. . . I believe they've dragged their feet, " he said.

"Not necessarily but it may well have created a situation where, by reason of the players in the market being aware of these increased powers, they could have acted in a different manner."

Burke said that, in principle, granting competition powers to regulators such as Comreg made sense. The Competition Authority has to oversee the entire Irish market but Comreg, with its narrow focus, is well placed to identify issues in telecommunications and could potentially act more quickly and effectively in this area than the Competition Authority.

He pointed out, however, that the British regulator has made only two objections (both against incumbent BT) in relation to its conduct in the broadband market and neither has resulted in adverse decisions against the company.

The deterrent effect of the regulator's powers should not be overlooked, he said, but strong regulation should not be seen as a panacea.

"This is not going to be the cure-all but it could be an effective tool, " he said.

"Clearly I think it would have."

Maloney said the extensive c^ompetition powers granted to UK regulator Ofcom had had a decisive impact on BT's business in a market where it was the incumbent operator.

He cites the regulatory regime as one of the main reasons for BT's decision to move its business rapidly from fixed-line telephone business to broadband internet.

"If they hadn't changed their behaviour, Ofcom would have taken a far more rigorous stance against BT in the UK and BT knew that, " he said.

A similar regime here would have helped speed up the process of unbundling the local loop and helped to encourage competition and investment in infrastructure and new telecoms services, according to Maloney.

"Broadband adoption would be a lot higher and it wouldn't be an election issue, " he said.